One and a half million more children in poverty by 2022

Published: 14 Mar 2018

Four months after releasing our interim report, we have today released our final cumulative impact assessment, exposing how much individuals and households are expected to gain or lose, and how many adults and children will fall below an adequate standard of living, as a result of recent changes to taxes and social security.

The report, which looks at the impact reforms from 2010 to 2018 will have on various groups across society in 2021 to 2022, suggests children will be hit the hardest as:

an extra 1.5 million will be in poverty

the child poverty rate for those in lone parent households will increase from 37% to over 62%

households with three or more children will see particularly large losses of around £5,600

The report also finds:

households with at least one disabled adult and a disabled child will lose over £6,500 a year, over 13% of their annual income

Bangladeshi households will lose around £4,400 a year, in comparison to ‘White’ households, or households with adults of differing ethnicity, which will only lose between £500 and £600 on average

lone parents will lose an average of £5,250 a year, almost one-fifth of their annual income

women will lose about £400 per year on average, while men will only lose £30

The negative impacts are largely driven by changes to the benefit system, in particular the freeze in working-age benefit rates, changes to disability benefits, and reductions in Universal Credit rates.

David Isaac, the Chair of the Equality and Human Rights Commission, which is responsible for making recommendations to Government on the compatibility of policy and legislation with equality and human rights standards, said:

"It’s disappointing to discover that the reforms we have examined negatively affect the most disadvantaged in our society. It’s even more shocking that children – the future generation – will be the hardest hit and that so many will be condemned to start life in poverty. We cannot let this continue if we want a fairer Britain.

"We are keen to work together with government to achieve its vision of a Britain that works for everyone. To achieve this outcome it is essential that a full cumulative impact analysis is undertaken of all current and future tax and social security policies. We have proved it’s possible and urge the Government to follow our lead and work with us to deliver it.”

As well as calling on the Government to commit to undertaking cumulative impact assessments of all tax and social security policies, particularly in order to comply with the Public Sector Equality Duty, the Commission is also reiterating its call for government to:

reconsider existing policies that are contributing to negative financial impacts for those who are most disadvantaged

review the level of welfare benefits to ensure that they provide an adequate standard of living

International Covenant on Economic, Social and Cultural Rights (ICESCR)

Equalities impact assessment

The House of Commons Treasury Committee Inquiry report on the Government’s Autumn Budget 2017 called for HM Treasury to produce and publish robust equalities impact assessments of future budgets, including the individual tax and welfare measure contained within them.

Literature review

The Commission is also publishing a literature review to accompany the Cumulative Impact Assessment Report.

The National Institute of Economic and Social Research (NIESR) was commissioned to carry out a literature review of the impact of welfare reform and welfare-to-work programmes and in particular, to examine the evidence about the ways in which protected groups have been affected by these reforms.